Georgia legislators grapple with the free market

From beer to solar panels and, now, $70,000 electric cars, state legislators are weighing whether to let Georgians buy what they want, the way they want, even if it comes at the expense of powerful businesses.

Three bills in particular this year are testing the Republican-dominated legislature’s resolve for a freer market versus protectionism. Backers say they want Georgians to be able to get more from young, innovative businesses.

Senate Bill 63 would allow consumers to take beer-to-go from local craft brewers and brewpubs, essentially skipping powerful beer wholesalers and retailers.

House Bill 57 is designed to make it easier and more affordable for consumers to put solar panels on their homes by allowing them to use third-party companies to install and own the systems. Utilities resisted the idea before winning restrictions that would protect their territorial monopolies.

House Bill 393 would allow Tesla Motors to sell an unlimited number of its electric cars directly to consumers without using independent new car dealers. The Georgia Automobile Dealers Association fought the effort initially, but now backs a revised version that at least could prevent other car makers from following in Tesla’s footsteps.

Overall, this year’s measures come with limitations that in some cases only barely crack open the doors for fresh competition.

Still, George Hooks, a Democrat who spent 32 years in the state senate, said he doesn’t recall ever seeing a run of such bills.

Legislators usually are wary of irritating their most influential business constituents, such as car dealers that employ nearly 30,000 Georgians.

“Those are some of the heaviest hitters in your community,” Hooks said. “It is difficult for any member of the legislature to go against the tried and true business leaders.”

Legislation that challenges such entrenched interests “is not going to happen overnight,” Hooks said. “Ideas change slowly in the General Assembly.”

But consumers show diminishing patience when it comes to getting what they want.

Technology and other innovations allow them to shop smarter, buy faster, skip middlemen, reach globally and get quick deliveries. Those trends may eventually put more pressure on legislators to pull down barriers that insulate some traditional businesses.

“Since consumers are empowered in this way, when they come across regulations and laws and so on that restrict their ability to buy … then they are going to be lobbying their representatives,” said Michael Crew, a Rutgers University professor of regulatory economics. “The people with the entrenched industries are going to be lobbying also, and they generally have more power.”

Said Crew: “The guy with the least weight is the individual consumer.”

When the brewpub legislation came up this year, backers unleashed a social media and email campaign to get legislators’ attention. That sparked thousands of emails. The pace was eventually matched by opponents working for beer wholesalers and retailers.

But when it comes to campaign money, it’s the traditional businesses that have built up years of goodwill. The Georgia Automobile Dealers Association, for example, has helped pump more than $600,000 into state legislative campaigns in recent years.

In 1999, association leaders won changes in Georgia law that essentially force new local car sales to only be made through independent dealers. They wanted to bar car makers like Ford and GM from unfairly running competing dealerships or selling directly to consumers via the web.

Those restrictions and similar ones in other states hamper California-based Tesla Motors, which produces the Model S, rated by Consumer Reports as this year’s top new vehicle.

Tesla doesn’t use independent dealers. Instead it sells cars direct online or through company-owned stores, including three in metro Atlanta. But in Georgia, it has been limited to selling no more than 150 new vehicles through the stores, under an exemption for custom-made vehicles. It has sold hundreds more to Georgians online, which it contends is allowed.

GADA contends Tesla violates the law and is suing to have the company’s local operations halted.

State Rep. Chuck Martin, R-Alpharetta, is now in his second year of pushing legislation to get the law changed in a way that lets Tesla grow in the state. He said his goal is to make it easier for Georgians to buy the vehicle they want.

“The government should not regulate the channel that you have to use to acquire something,” Martin said. “That falls in with the Tesla thing. That falls in with the brewpub thing.”

Martin said even protected businesses need to innovate to stay healthy.

“The regulations,” he said, “can’t protect these old business models.”

State Rep. Tom Rice, who voted against the car dealership law change in 1999, now say he believes the current system offers consumers protections — such as handling recalls — that a manufacturer such as Tesla might struggle with on its own.

The Norcross Republican said he worries about any move that might allow other big car makers to operate without their independent dealers, putting at risk investments and jobs at the dealerships and reducing consumer choices.

“What happens to the people in the towns where these dealerships are?” Rice asked.

State Rep. Mike Dudgeon, R-Johns Creek, is a tech industry executive who authored the solar panel financing bill and signed the Tesla legislation.

“I come from an industry that is very wide open, very competitive,” Dudgeon said.

To win utility backing for the solar legislation, he put in restrictions that prevent solar companies from selling excess power from home systems to anyone other than the homeowner or local utilities.

Despite this year’s bills, he doesn’t expect any Georgia legislators to significantly challenge what he calls “the white whales” — big traditional protections, like the state’s three-tiered alcohol system that separates makers, wholesalers/distributors and retailers.

“I don think the legislature right now is configured to go after one of those big things,” he said.

Meanwhile, legislators are considering forcing young companies with innovative business models to abide by some of the same kinds of regulations that more established rivals face. Such measures worry upstarts like Uber and other ride-sharing services, which could be required to meet insurance and tax requirements similar to those required of traditional competitors.

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